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Your Virtual Front Page, Monday, May 14, 2012

Bet you thought you’d never see another one. Well, I like to defy expectations, so here’s your top news at this hour:

Greek deadlock heightens fears of full Europe crisis (WashPost) — And so we all watch with bated breath, especially if we are named Barack Obama — since this is the one thing most likely to mess up his re-election chances, totally beyond his ability to do anything about it. Of course, if Europe goes down the tubes, it will pretty much suck for the rest of us, too.

Brown Asks Californians to Choose: Cuts or Taxes (WSJ) — Meanwhile, news from another failed state. No, really, I just like to check in now and then to see what’s happening with the original Gov. Moonbeam. Which I mean in a nice way — I’ve always liked Jerry Brown, and here we have him bravely trying to manage the unmanageable. In case you can’t read this version on account of the WSJ pay wall, here’s the NYT version.

Paul Ends Active Campaigning for Presidency (NYT) — You know what this means, don’t you? It means that from now on, when we type, “Mitt Romney, the last GOP presidential candidate left standing,” we won’t have to add, “except, you know, for Ron Paul. If you count him.”

Nothing about the ongoing carnage in Mexico? I guess this drug war savagery has become so common that it doesn’t even qualify as “news” anymore. Still, 50 beheaded bodies in a nation bordering the US seems like a pretty big deal.

For all you folks out there who continue to cling to the naive notion that pro-life is really about life read this Salon article about the death of Mitt Romney’s relative. Shows how ridiculous the whole “pro-life” movement really is:

Using austerity to fight a recession is a bit like trying to fight gravity. No matter how well thought out it is it just doesn’t work. If you invent a gravity defying sphere and it drops to the ground it will do you no good to reshape it into a cube. Gravity will always win. So why do all the European countries insist on continuing with the same failed policies of austerity? Ain’t gonna have the impact on confidence that it’s champions insist it will. Yet it continues to be the order of the day. And that’s what the Republicans want for us. Be afraid, very afraid.

Not so sure about Ms. Merkel. She could lose so much support via the various regional elections that her ability to govern will be essentially at an end. It will be interesting to see how this all plays out politically but as economic policy goes the Euro is in deep trouble and I suspect the austerity movement has lost most of it’s momentum.

The big question here is how this translates across the pond. If the president can make the election one of austerity vs non-austerity he can merely point to the failures in Europe as proof that the GOP policies cannot work. Comparing the slow growth of the USA with the depression level economies of Europe should be compelling evidence that we shouldn’t go there.

But will the voters be convinced? If Romney can make the case that we are somehow different then the Mittser could sway voters his way if the economy continues to flounder. Of course this is all mute if the summer produces healthy job gains. Nothing Romney says will make any difference in that case.

Well, Doug–how about this: the feds borrow to rebuild our infrastructure. The people who do the work buy stuff, pay taxes, the people they buy from pay taxes, etc. Meanwhile, goods can move easily through this new system….you borrow to plant the seeds for future reaping. It only doesn’t work if you refuse to collect taxes.

Doug, times ARE tough right now. Where we went wrong is when things are going well we still have deficit spending. It’s astonishing that when the nation’s unemployment rate was under 6% in the mid-2000s we were still running deficits. That’s the result of a huge amount of military spending and a ridiculously low tax rate for the wealthy.

@ ‘Kathryn – If we were only borrowing for expenditures that had a positive economic return of some sort, that might make sense. Instead we borrow so that Leon Panetta and Nancy Pelosi can fly home on private jets on the weekends, lest they have to wait at the airport and go through security screenings. We also borrow to put shrimp on a treadmill and to do a study on whether or not we have too many studies….

Who are the Feds going to borrow from? China? Because you’re going to need seed money to start this operation.

Who is going to be manufacturing the things the workers purchase? China?

If it doesn’t work, who is going to pay infrastructure costs? China? We still need to pay for things like national defense, money to ship over to 3rd world countries that hate us, salaries for 435 (and growing) US Representatives, etc…

If we were in a deep recession (which we were and are still realing from the effects) then we should spend whether it’s for good stuff or not. Even wasteful spending would spur the economy. If there are no bad bridges in need of replace we could tear down a perfectly good one an rebuild it as a way of stimulating the economy.

But we don’t even have to make that choice. There are plenty of good, useful and stimulative projects out there. We could widen I-26 to Charleston and put a ton of people to work. Or better yet we could build a high-speed rail line in the interstate median. Either way we stimulate the economy today and build for tomorrow.

“If we were in a deep recession (which we were and are still realing from the effects) then we should spend whether it’s for good stuff or not.”

You don’t have a single clue about economics do you?

You lose your source of income, what’s the first thing you think of doing? It’s not spending money.

“We could widen I-26 to Charleston and put a ton of people to work. Or better yet we could build a high-speed rail line in the interstate median. ”

Who’s going to pay for this? We can’t keep cars from crossing the median as it is, so you want to locate a multi-billion dollar rail system in a location where a $400 car could likely disable it for months? Why don’t we just start on a smaller scale and put another 200 city buses on the streets of Columbia, that’s another 200+ jobs created.

Silence I agree we shouldn’t spend money wastefully. It’s not necessary. But there is precident for wasteful spending that stimulated the economy to good effect. In the 80s that’s exactly what Reagan did by throwing money down the military rathole. All those wasted billions did get us out of the recession of 82/83.

By which I mean that while the federal government has a few other core functions, that always has been, and always will be, the most expensive, if the federal government has its legitimate priorities straight.

It’s why the founders argued so much over whether to maintain a standing army, or any sort of navy — it’s just way more expensive than, say, employing people to collect import fees.

It’s important to distinguish military spending from defense spending. I’m in favor of the latter but adamently oppossed to the former. In the 80s much of what went into the military budget was nothing but classic waste ($400 toilet seats, star wars missile defense, silly WW II era battleship refurbishment, etc). Today we spend excessively on the military but its still not adequate to pull us out of recession. It’s just not to the extreme that we spent in the 80s.

@Kathryn – So what you’re saying is we have a choice. Cut spending or increase taxes. And instead of cutting spending on useless programs like 99% of social programs you’d rather see those of us who pay taxes fund those programs. Things look a lot different when you’re actually paying taxes rather than relying on someone else.

@ Kathryn – The question is not whether it’s deficit spending or deficit taxing. It’s what the appropriate tax rate & size of government (at all levels) should be. It’s usually politically popular to push for tax cuts, and it’s usually politically popular to expand programs.

Did Clinton actually run a surplus, or was it really just an accounting gimmick? Wasn’t it just for about two years, during which unemployment was really low and the economy was REALLY clicking along? So, best case scenario we’ve run a surplus for 3 years out of maybe 50?

@bud – the $400 toilet seat example may be a case of funds being diverted into black programs – specifically top secret development programs such as the ones that produced the U-2, SR-71, F-117, B-2 etc. I wasn’t around and I don’t know for sure, but I’d bet my $700 hammer on it.

The Iowa-class refurbishment wasn’t necessarily a bad idea, either. New warships are expensive to build, and the BB’s were built to last. Modern ships are mostly aluminum, but the BB’s are steel, about a foot thick at the waterline, I believe. A BB would have pretty much laughed off the Exocet anti-ship missiles that sank the HMS Sheffield in 1982 or damaged the USS Stark in 1987. If the USMC ever needed to perform a serious amphibious assault again, we’d wish we had the BB’s.

One other point to make (again) is that defense systems spending is great stimulus spending. Most of the labor is well paid, unionized and it’s all domestic. The plants and most of the components are domestic as well, due to security concerns very little componentry is imported. The corporations are domestic as well, paying dividends to shareholders and taxes to state/local and the federal government. It’s really one segment of manufacturing that won’t move overseas. It is also some of our most skilled manufacturing, incorporating the highest technology: Advanced materials, construction techniques, metrology, machine tooling, precision controls, electronics, etc. A lot of the skills and materials developed manufacturing defense systems do eventually wind up being used in other systems.

Yes, the dreadnoughts provide you with awesome artillery support for an amphibious landing.

Of course, we found at Omaha Beach that in a pinch, destroyers can give you pinpoint artillery support, up close, that the big guns can’t. If you’re willing to spend a shell on one guy seen on a ridge, which the U.S. Navy was prepared to do that day.

BB’s had 16 inch guns, which had a range roughly twice that of the 5 inch guns on the DDG’s. Also a 5 inch shell weighs about 70 lbs, while a 16 inch one weighs 2000 lbs and up. Nothing like VW beetles dropping out of the sky to ruin your day.

Of course a DDG has cruise missles, etc. which count for a lot. Still, for the price of 1 cruise missile, you can buy tons (literally) of 16 inch shells and powder.

The new Zumwalt Class destroyers will have a 155mm gun that should have a range of over 100km, and will fire 10 rounds/minute. That’ll be some good firepower. Of course, it won’t have 12 inches of steel armor.

Silence, the manufacturing component of military spending is very stimulative. But most military spending is on payroll. When sailors and soldiers are deployed and especially when deployed in foreign countries, a large portion of their paychecks are spent abroad. That could ultimately help us by helping foreign nations who would in turn buy more imports. Still I would maintain that military spending is not the most stimulative type of spending that the Feds can undertake.

Brad, In my administration I will request that parliament direct the admiralty to appropriate for the construction a fleet of first rate ships of the line. Our navy will repel our enemies with withering broadsides!

@ bud, I guarantee that soldiers aren’t spending much money in Afghanistan. There’s not much to buy on the local economy, and AAFES (BX/PX) ships their profits back home to spend on whatever. Most military pay is sent home to support families, or put in the bank (stateside).

Germany & Japan – Yes. Lotsa money spent there by GI’s. Not that Germany and Japan they need any help from us.